Shareholder: Steve’s Health? Apple: Next Question, Please?

February 25th, 2009 at 5:58 PM - Reports by Bryan Chaffin

Apple CEO Steve Jobs

Though one shareholder asked questions about the health of Steve Jobs and questioned whether the board was living up to its fiduciary responsibility to disclose material information to shareholders, Apple's board of directors stuck to the party line that it was living up to those obligations, and that there was nothing more to report.

The issue first arose when Brandon Reese from the AFL/CIO's investment arm -- a large shareholder in Apple Inc. -- presented a shareholder proposal, "regarding principles for health care reform." That proposal was voted down by shareholders from the proxy voting alone.

After reading his proposal, Mr. Reese tried to ask about the health of Apple CEO Steve Jobs, but was rebuffed by Daniel Cooperman, the chairman of the meeting, who said that Mr. Reese was only allowed to speak at that moment about the shareholder proposal he was bringing to the company.

Mr. Reese agreed to await the question and answer session for the meeting, and brought up the issue anew at that time.

He positioned his questions about Steve Jobs from the standpoint of the board of directors' fiduciary responsibility to shareholders to disclose material information about its executives, and by asserting that they had an obligation to correct misinformation in the market place about the company. He also challenged the board's lack of information about a succession plan for Apple.

"What did the company know, and when did they know it?" he asked in summation. "What's the succession plan?"

Apple COO Tim Cook, who was the executive in charge of the meeting, handed the question to Arthur Levinson, a member of Apple's board since 2000. Mr. Levinson largely repeated the company line of the past by pointing to the statement Apple made earlier this year.

On January 5th, the company issued this statement: "It is widely recognized both inside and outside of Apple that Steve Jobs is one of the most talented and effective CEOs in the world. As we have said before, if there ever comes a day when Steve wants to retire or for other reasons cannot continue to fulfill his duties as Apple's CEO, you will know it."

Mr. Levinson added to that, sort of, by saying, "Nothing has changed." On the surface, that's not saying much, but Mr. Levinson stressed that he feels as if the board of directors has met all its obligations to shareholders regarding this matter. If that is so, there is nothing more to Mr. Jobs six month medical leave-of-absence than what he said in an open letter in January.

Mr. Levinson also said that the board has had regular meetings on succession plans since he first joined the board of directors in the year 2000. He said that its an issue the board takes seriously, and added, "You can assume we will do that responsibly."

What the board will not do, however, is tell shareholders what those plans are, something that some shareholders want. We say "some shareholders" want this, because though the issue is often discussed loudly in the mainstream media, no one else at the meeting asked questions about it during the meeting.

One shareholder did, however, ask if those in attendance could sing Happy Birthday to Mr. Jobs, whose birthday was the day before this meeting, something most of the room joined in doing. He also asked the board and executives in attendance to tell Mr. Jobs he was missed.

Other than that, the subject was not brought up by a shareholder.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.